Citizens Property Insurance's push to inspect homes and revoke discounts for hurricane-resistant features has drawn fire and questions.
Premiums went up for nearly three-fourths of the 225,502 homeowners who have had the inspections. About 7 percent had decreases, and there was no change for 18 percent. The average inspection resulted in a $598 increase.
State-backed Citizens is the largest property insurer in Florida with 1.4 million policies.
We answer common questions about the inspections.
Why is Citizens doing the inspections?
Citizens found many forms used to verify discounts weren't filled out correctly and it appeared some customers were getting discounts they didn't deserve.
Citizens plans to conduct about 138,000 more residential inspections this year.
Some people think Citizens is using the inspections as a back-door way to raise premiums more than 10 percent a year – a cap set by state law. Citizens estimates premiums increased by $137 million based on inspections done so far. The insurer has spent $35 million on the inspections.
"The purpose of this program is not to circumvent the 10 percent cap," said Citizens spokeswoman Christine Ashburn. "Citizens provides $1 billion in credits annually to its policyholders. It is imperative that we only provide credits for policies which actually contain the wind mitigation features."
She said it's even more critical because the insurer has the ability to charge fees to nearly all Floridians to offset deficits if there's a major hurricane.
What should customers do to prepare for the inspections?
Customers should make sure shutters and other hurricane-resistant features are easy for the inspector to examine. Shutters don't have to be up, but the hardware that holds them in place should be permanently installed around the openings. Attics should be cleared out in advance so the inspector can verify certain features of the property such as how the roof is connected to the walls. Inspectors can remove credits for features they can't see, and they don't have to wait if the features aren't ready to inspect, according to Citizens.
Wayne Bragg, of Davie, said Citizens sent an inspector last year and the discounts were approved. This year, the inspector said he couldn't see the trusses in his attic because insulation was in the way, and he was unsure if all the shutters were there because they were stacked up – which Bragg disputed. After the inspection, Bragg said Citizens informed him his $4,700 annual premium would increase by $3,000 because discounts were removed and his roof is too old.
Policyholders should also have copies of contracts, building permits, receipts and other paperwork that document the home's upgrades.
Marc Velletri, of Wilton Manors, said a Citizens inspector questioned the hurricane-impact windows installed in his home in 2005. "Anyone can tell they are impact windows and all were labeled plus I had one of the original removable labels and Home Depot receipts. But he argued because some of the white print on the glass was difficult to make out," Velletri wrote in an email.
Diana Latzko, a Citizens policyholder in Davie, gathered an arsenal of documents and permits before a Citizens' inspector showed up at her home to verify hurricane-resistant upgrades. "I had a whole folder of everything, approval codes [and] clingy, silicon" stickers she said. Still, the insurer planned to increase her roughly $1,500 annual premium by $148. She successfully fought that with additional documentation.
Ashburn said Citizens can't comment on information about specific policyholders because of confidentiality requirements.
What happens after the inspection and when would the premium change happen?
A letter with the results of the inspection is mailed about 45 to 60 days after the inspection and it includes instructions on how to get a copy of the inspection report. Premiums increase at renewal for customers whose discounts are removed, and any new discounts take effect immediately, according to Citizens.
What happens if policyholders can't afford the higher premium?
Customers can dispute the findings by giving Citizens or their agent photos of the discrepancy and documentation, including a new inspection report paid for by the policyholder; roof permits; notice-of-acceptance letters for doors, shutters and other wind-resistant features; and invoices, sales receipts and other documents that show details of the products and work done.
Policyholders who don't prevail can try increasing the policy's deductible and lowering coverage, which should lower the premium. They can also shop around. But going with another insurer doesn't mean you're safe from getting re-inspected by the new company and losing discounts.
Homeowners with mortgages who can't afford the higher premiums could face losing their homes to foreclosure.
Should consumers consider making upgrades after the inspection and how can they qualify
Latzko said she had the frame around her door redone to qualify for a discount after an inspector she hired a few years ago suggested it. She said she got the original discount because the inspector allowed her to make the upgrade before he returned to inspect the home.
Once the work is done, policyholders should give Citizens or their agent proof of it. They can order a remediation inspection at a reduced fee of $50 to $100, according to Citizens.
Before you make the upgrades, do the math. The upgrades will make your home safer, an important benefit, but if you're strapped for cash, be clear on how much your premium would change if you make a certain improvement and whether the product you're using will qualify. Ashburn said Citizens can only provide an estimate of potential savings when it sends a renewal notice.
Paul Stuart, a Boca Raton resident and Coconut Creek City Attorney, said Citizens incorrectly had his opening protection discount removed after an inspection. That and some higher coverage limits made his annual premium increase $638 to $4,466. When Citizens later restored the opening protection status from "none" to "Class A," his premium only decreased by $22, or less than half a percent. In a complaint to state regulators, he said Citizens is overcharging people with hurricane-resistant protection while getting the benefit of reduced financial exposure, and the process reduces incentives for people to upgrade their homes.
More information about the inspections is available by clicking on the "frequently asked questions" tab at https://www.citizensfla.com/policyholder/about_inspection_outreach.cfm .
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